Fertiliser and Biofuel Policies in the Global Agricultural Supply Chain: Implications for Agricultural Markets and Farm Incomes

This report analyses policies along the agricultural supply chain, in particular support measures for fertilisers and for biofuels. It uses the OECD Fertiliser and Biofuel Support Policies Database that covers polices in 48 countries (including the EU and its Members) and assesses the market effects of these policies with a computable general equilibrium model, MAGNET. This report finds that biofuel support policies generate additional demand for feedstock commodities and, therefore, higher incomes for crop farmers in subsidising and non-subsidising countries. In contrast, these policies increase costs to downstream industries, including livestock farmers, and to consumers. Fertiliser support policies reduce crop production costs and hence increase yields, production and incomes for crop farmers in subsidising countries. However, they lower crop farm incomes abroad, while livestock farmers in both country groups face lower feed costs and, in consequence, lower livestock prices.